BofA Securities analyst Ross Fowler reinstated the Buy rating on Edison International (NYSE:EIX), Pacific Gas & Electric Co. (NYSE:PCG) and Sempra (NYSE:SRE).
The analyst writes that the companies are trading at discounts due to past wildfire concerns. Despite higher customer rates and concerns over affordability, California’s mechanisms for managing wildfire risks are among the best in the country, and recent developments create a favorable entry point for investors, adds the analyst.
Last month, the Park fire, the largest wildfire currently burning in the U.S., ravaged over 426,000 acres in Northern California, particularly within Lassen National Forest.
The fire spread rapidly due to hot, dry conditions and dense vegetation. Due to the region's rugged terrain, firefighters face difficulties in managing the fire. This fire has become the fourth largest in California history and could surpass the third-largest Mendocino Complex fire.
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